When NOT to go public

It seems that nearly every business owner out there has dreams of taking their company public.  This is especially true in the technology industry where you can be losing money but generate a windfall of cash by offering shares to the public.

An article earlier this month by Bob Parsons, founder of GoDaddy.com outlines why, after doing all the filing needed and receiving SEC approval, he decided to withdraw his registration with the SEC to become a public company.

One of the primary reasons cited in his post are the stringent accounting methods that the SEC would require them to use if they wanted to be public. 

With the ridiculous Sarbanes-Oxley Act requirements, many companies (and their the CEOs who are now ultimately responsible for financial errors) are deciding to either not go public, or to go public in a foreign market to avoid the overbearing requirements of the US market.

SOX was a typical over-reaction to the Enron/Tyco/etc scandals of the past few years.  Just like preventing you from bringing hair gel on an airplane probably doesn't make you any safer, but makes you feel safer because "at least they did something", many of the SOX requirements don't do anything to stop fraud, while making it much harder to do business as a public company.

Do we really want US companies to feel like that have to go to foreign markets if they want public investment?  Business is what drives our economy.  Let's figure out how to make it easier for business owners to operate, not hamstring their efforts to grow (and create jobs, and buy buildings, and pay taxes).

Comments

[Matt]

Wow... keep preachin'... and take it to the streets!

I suppose that this means that FHO won't be going public on a US exchange any time soon? That's a pitty.... because I have been saving money and waiting for the right time to publicly invest in the global dominance of JB Enterprises.

[E WEBB]

Are you the Jeremy Brandt from the fast home offers.com . I wanted to send in some information but was cautious.

[Jeremy Brandt]

Yes, that is one of the companies I own. Feel free to contact me directly via the web site if you have any questions!